CERCLA LITIGATION Planning to Litigate the CERCLA Case John Dunbar
CERCLA Liability for releases of hazardous substances
Who can be liable as a responsible party? • Current and past owners and operators • Generators • Transporters • Others, such as lenders, parent corporations and/or controlling shareholders, successor/ predecessor corporations, individuals who participate in decisions concerning handling and disposal 42 U.S.C. § 9607(a)
What can PRPs be liable for? • Response & Removal Costs • Any PRP “associated with a ‘facility’ from which there is a release, or a threatened release which causes … response costs, of a hazardous substance, shall be liable for . . . [any] necessary costs of response … consistent with the national contingency plan.” 42 U.S.C. § 9607(a)(4)(B). • Natural Resource Damages • Damages “for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release.” 42 U.S.C. § 9607(a)(4)(C). • Health Assessment Costs • Costs “of” any health assessment or health effects study carried out under section 9604(i)….” 42 U.S.C. § 9607(a)(4)(C).
Claims • Cost recovery • Contribution – allocation
Defenses • Acts of God, war, third parties • Passive Migration • Bona Fide Purchaser • Hold Property in Trust • Hold through exercise of security interest • Statutes of Limitation
Defenses - Statute of Limitations • Cost Recovery • Section 107 cost recovery actions must be commenced: within 6 years of initiation of physical on-site remediation actions, or • within 3 years from completion of a removal action • • Contribution • Section 113 contribution claims must be commenced within 3 years of: • the date of judgment … under this chapter for recovery of such costs or damages, or • (B) the date of an administrative order for a de minimis settlements or a cost recovery settlements, or entry of a judicially approved settlement with respect to such costs or damages.
Divisibility leading to apportionment • A defense to joint and several liability • Can defendant demonstrate a reasonable means of apportioning harms it caused? Burlington Northern & Santa Fe Ry. Co. v. U.S., 556 U.S. 599 (2009)
Equitable Factors in an Allocation • Contribution to release distinguishable • Amount • Toxicity • Involvement • Degree of care • Cooperation with government officials • Culpability • Knowledge • Others
Road Map • Insurance • Budgeting and Staffing • Claims and Defenses – Initial Case Evaluation • Investigation • Experts • Litigation Plan • Discovery • Motions • Settlement • Evidence Map - Trial Plan
Insurance • Finding the policies • Company records, old accounting/banking records, brokers, lawyers, former employees • Lost policy requests to the insurer – ORS 465.479 • Duty to investigate thoroughly and promptly • Process to determine terms and amount of coverage • Cooperation by both sides
Exhaustion of policy Are costs defense or indemnity? Defense - Remedial investigations, risk assessments Indemnity - Feasibility studies, removal actions ORS 465.480(7)
Know your client’s rights under OECAA • Oregon Environmental Cleanup Assistance Act • Independent counsel – represent only the insured • Regular and customary rates for counsel and consultants • Duty to pay promptly • Rebuttable presumptions: investigation costs are defens e, remedial costs are indemnity • Claims for unfair settlement practices (treble damages, attorneys’ fees) ORS 465.475 to 465.485
Protect the client • Tender Promptly • Written common interest agreement with insurers who defend • Coverage counsel • Joint defense or common interest agreement with other PRPs
Consider other claims, venue • Oil Pollution Act - 33 U.S.C. §2701 et seq ; ORS 466 • State Superfund Law Claims - ORS 465 • No dispute that state law authorizes claims against state agencies • Aviall does not apply to state law contribution claims • No right to prejudgment interest • Six year statute of limitation • Common law claims • Trespass, nuisance, negligence, breach of contract • Jury rights • Do common law claims belong in state court?
Documenting Claims • Establish record keeping requirements with client, consultants, contractors, subcontractors • Preservation notices, reminders • Document expenditures with detailed billings, backup • Document connection between expenditures and response activities • Segregate recoverable and nonrecoverable expenses
What’s recoverable – two types of recovery • From Insurers • Defense Costs • Indemnity Costs • From PRPs • Costs of response necessary – threat to health/environment • Consistent with NCP - 42 USC §9607(a)(4)(B)
Investigation • Client Docume nts • Preservation Obligations • Spoliation • Third Parties • Public Records Requests • Witness interviews • Former employees • Photographs • Did releases occur, where, how, when? • Ground-level and aerial photos
Ground-level photos
If only…
Stereoscopic Photo Analysis
Aerial Photos of the same site • 1952 1997
Experts • Identify the issue • Select the expert, contract • Expert reports and discovery • FRCP 26 amendments – Draft reports and some attorney communications are protected, but not all • Consider agreeing to take depositions in state court, or not to in federal court • Translate the Opinion into Graphic Evidence
Combining media
Discovery Planning • Requests for Production • Use, amounts, timing, care taken • Requests for Inspection • Testing, examination of the facility itself • Requests for Admissi on • Advantage: Efficient, fees may be awarded if denial improper • What: Historical facts, documents authentic • Interrogatories • Depositions with written questions • What to ask: are documents authentic
Discovery planning • Depositions • Fact witnesses • Organizational depositions - FRCP 30(b)(6), ORCP 39C(6) • Perpetuation – FRCP 27; ORCP 37, 39 • Expert reports and discovery • Reports - be careful of the mixed “percipient fact” and expert witness • Consider agreement to take depositions in state court, or not to in federal court
Other Litigation Considerations • Third Party Claims • Bifurcation • Liability, then Remedy or • Remedy, then Liability • Special Master
Develop the Evidence Map Claim 1 Elements Evidence Witness Notes 1. 2. 3.
Developing Trial Themes Theme 1 Evidence Witness Notes
Questions?
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